How Telematics Can Lower Your Insurance Premiums

Did you know that safe driving can get you a discount on car insurance? Telematics auto insurance utilizes telematics technology to collect data about your driving that your insurance company can use to award discounts to safe drivers, as well as to those who drive fewer miles than the average individual.

What Is Telematics?

Telematics is a system that gathers and transmits information about a vehicle’s performance, such as speed, location, braking habits, and fuel economy, using sensors and GPS. Telematics is essentially a software that shadows your driving habits and helps determine if you are a good driver. It measures data such as vehicle speed, location, acceleration, braking patterns, fuel economy, and engine diagnostics. Using this information, an insurance company can assess the level of risk you pose to cause an accident.

Most insurance companies offering telematics options will collect data through an app installed onto your mobile device, or through a device that is physically installed into your vehicle’s computer (OBD-II) port. The app or device will track when, where, and how you drive to calculate your “risk level”, or the probability of you experiencing a car accident based on your driving habits.

How Telematics Can Benefit Your Business

For commercial auto insurance, trucking companies and contractors will more often utilize the plug-in devices or Bluetooth beacons to collect driving data. These data collection devices tend to be more accurate than a mobile app , since they are applied to a specific car. Some commercial telematics insurance options also include video monitoring to keep an eye on a driver’s actions while they drive, as well as their surroundings.

Just like for residential drivers, telematics solutions for commercial auto insurance provide insurance carriers and employers with insights into the driving habits of those who operate commercial vehicles.

Benefits of Telematics for Car Insurance

Telematics can help you lower your car insurance rates. If the data being collected by your insurance company shows that you are a safer-than-average driver, you may receive a discount on your car insurance. The data collected from your mobile app or commercial vehicle plug-in can also provide insights into drivers’ day-to-day habits, which can be used to improve driving practices. Drivers employed by trucking companies or contractors can especially benefit from feedback on their driving practices, as these businesses have enhanced brand image when they are perceived as “safe drivers.”

Here is our breakdown of the benefits of driving with Telematics:

Customized Insurance Premiums: Insurance companies can provide customized rates based on real driving behavior rather than broad demographics thanks to telematics, which might result in cheaper premiums for cautious drivers.
Discounts and Savings: Many insurance companies track safe driving practices with telematics devices and give prizes and discounts for them.
Efficiency of the Claims Process: By offering comprehensive accident information, telematics data helps expedite the claims process by cutting down on the need for drawn-out investigations and thereby decreasing expenses.
Recovery from Theft: Telematics-enabled GPS tracking can facilitate the prompt recovery of pilfered automobiles, therefore reducing losses for both policyholders and insurers.
Insurance Based on Usage (UBI): Telematics can lower rates for drivers with low mileage by supporting UBI models, which base premiums on the actual usage of the vehicle (mileage, time of day, etc.).
Better Driving Habits: Drivers receive feedback on their driving behaviors, promoting safer driving behaviors that can reduce the number of collisions, insurance claims, and, consequently, insurance premiums.
Precise Evaluation of Risk: A more precise risk assessment of individual drivers by insurers results in more equitable pricing.
Identify Vehicle Mechanical Problems Early: With identifying mechanical problems early on and minimizing breakdowns and accidents, vehicle health monitoring could reduce claims and premiums.
Preventing Accidents: This is the main goal of telematics. Accidents can be avoided with real-time feedback and notifications (such as speeding and hard braking), which reduces the amount of claims and insurance costs. If you do end up in an accident, telematic data can even be used in court as evidence to help establish who was at fault.

What Auto Insurance Companies Offer Telematics?

Many car insurance companies offer telematics to lower the cost of your auto insurance policy. When you work with an insurance company like Strickler Insurance, we can find the auto insurance option that fits you and your needs

Is Telematics Auto Insurance Worth It?

Whether or not telematics auto insurance is worth it is heavily based on your day-to-day driving habits. For both residential and commercial purposes, if you are deemed a “risky” driver by your insurance company, you could see an increase in the cost of insurance, rather than a discount. Even if you are a “safe” driver, you may not get a discount if you drive an average number of miles and/or commute to work.

Telematics auto insurance can be a great way to manage a fleet of vehicles for commercial purposes. When drivers know that they are being monitored, they are more likely to employ safe driving practices. If unsafe driving practices are observed, coaching can be utilized to improve driving habits. Safer driving also enhances commercial automotive brands’ image, which could be considered another positive.

Contact Strickler Insurance For Telematic Car Insurance Options

Some of the insurance providers we work with offer telematic car insurance options that can help you save on your insurance. Learn about our different options and contact us today for personal auto insurance, auto insurance for your business, or any other insurance need you may have.